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Page Sections -
How your credit score affects your auto loan rates
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Warning about car dealer low APR new car
financing, few people qualify
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Auto Leasing Financing
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Your Deposits And Down Payment
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What Should Your Credit Score Be For Approval On New
Car Loans?
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Steps to take before you apply for new car loans
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Good Sources of Online New Car Financing
| Driving Records
How
your credit score affects your auto loan rates
People
with bad credit pay higher auto loan interest rates. It can hurt
your job prospects, insurance companies check your credit too.
Get your credit report
instantly online, it's a must for
The Folder.
DO NOT apply for new car
loans until you get your credit report WITH credit score. Get it
online at  Equifax,
Experian
or
TrueCredit.
Remember, you can run your own credit file all you want, but if
dealers run it for new car loans, then your score drops a bit. If
your score is <550, don't apply for new car loans until you learn
how to repair your own credit. Your last auto financing resort is a
bad credit auto loan.
Online
Auto Loans: Getting the lowest Auto Financing APR
According to the Consumer Federation of America, car buyers are
often overcharged by 3% on their loans at the dealership, which can
add $1000 to the life of their loan. Your best sources for new car
financing are new car loan sites such as
E-LOAN and
Capital One Auto Finance With the lowest online auto
loan rates, they usually beat dealers, no application fees, or down
payments. Your new car loan is approved in minutes. These are not
bad credit auto loans. Get your online auto financing quotes,
compare to dealer auto financing, use whoever has the best car loan
interest rate. Online auto loan rates are the standard for dealers
to beat. Use online car loan payment calculators and choose your
best auto financing.
I'm
paying cash, why does the dealer want me to fill out a credit
application?
Dealers tell people it is required by
the Patriot Act to monitor cash. I have not verified it, who knows,
maybe they will pressure you to use them for new car finance. There
is a lot of cashiers check fraud; you can see why they want check
you out. Some buyers tell me they convinced the dealer to relent.
How to
get bad credit auto loans
If your
Credit
Score is < 600 don't
submit loan applications that get rejected, dropping your credit
score even further. Apply to
AutoCreditFinders,
they find "bad credit car loans"
for you. They get you new car financing from
high
risk lenders, with decent online auto loan rates,
even with a bankruptcy. If your score is > 550, no bad credit for 6
months,
AutoCreditFinders Bad Credit Auto Loans can help you
establish credit with lower online auto loan rates than dealers. If
you had bad credit in the past, but now you make more money, you'll
find you are cash rich, and credit poor. Then a bad credit auto
loan might be your only hope.
Estimates show that
as few as 7% of you will qualify for those low APR new car auto loan
rates we see advertised by car manufacturers. Some low APR car
loans require a credit score over 700 to get that rate, and most
require 36 months to pay off the loan. Many of you cannot pay off
the auto loan in 36 months, so you may be forced to pass on the
deal.
"Subject
To Financing": why the dealer
called you 2 weeks later to re-sign your auto loan
New car financing
at the dealer can be a headache. The "Subject to Financing" clause
appears on paperwork of all new car loans. It means the deal is not
done, yet you think you are signing a contract. Then 2 weeks later
the car dealer calls saying "your new car loan fell through." They
knew what you qualified for when you bought the car, a common auto
loan scam, usually pulled on people with bad credit. You should not
buy a new car first then worry about new car financing. When you
buy a house, you MUST have approval first, so have your car loan in
order before car shopping. Use online auto loan sites such as
Capital One Auto Finance
and
E-LOAN.
The lower online auto loan rates avoid these scams. Sometimes
dealers call and say they found you a lower APR. Oh, Really? Have
them fax you over all the new figures and APR in writing, and make
sure they did not increase the number of months. Otherwise do not
re-sign any contracts. We are big proponents of online new car
loans. Don't get stuck with bad credit auto loan if it's not
necessary. This would have been avoided if you used online auto
financing.
Financing
used car loans, person to person
If you're buying a used car, how do
you finance a used car loan? Capital One Auto Finance has
person-to-person used car loans. Use these used car
loans to pay your seller. They work smooth too, like butter! I
helped my friend Jerry by a used Lexus from a private seller. You
apply, they FedEx the used car loan check to you, then give it to
the seller, who cashes the check. Done deal.
Keep your debt to income ratio and credit balances
low
It's crucial before you attempt new car financing, to get your
credit balances below 50% of your credit limit or they lower your
credit score. You pay on time but can still have a low credit score
if balances are too high, you applied for credit recently, or have
too many open accounts. This surprises many people applying for auto
loans who get rejected. Get your debt to income ratio below 30%,
otherwise banks stick you into
bad credit auto loan.
If leasing, try
Lease Wizard's
Live Lender Quote (L.L.Q.) giving you 6 new car finance
quotes from lenders in your area. Use it to bargain with your
dealer on a lease.
New
"bad credit" car financing credit score scam
This happens often
with new car financing. One buyer told me his score was 780 from 3
credit bureaus. He applied for auto financing at the dealer. Four
sales guys came out of the finance office with a bogus "credit
score" of 580 circled in red. They lied that with his bad credit
they could get him financed at 10.9%, not at the special 2.7% auto
loan interest rate. It's New car finance trickery. He
pulled out his
own credit report showing Equifax at 780, why is theirs is
580? Three salespeople scattered, the last guy lied that credit
agencies show better credit scores to consumers than to lenders. The
buyer left, buying his Chrysler elsewhere at 2.7% APR. For people
with bad credit, this scam works perfectly, suckering you into a bad
credit car loan.
Warning
about Low APR auto loans (0%, 1.9%, etc.)
Usually low APR rates like 0% or 1.9% are offered to few people with
perfect credit, on new car loans typically 12 to 36 months.
According to J.D. Power, only 7% of new car sales in 2003 took
advantage of these low teaser rates, down from 10% in 2002. Most of
you planning 48 or 60 month auto loans, or used car loans won't get
0%. Ads say "with approved credit". You either get the low car loan
APR or rebate, not both. Calculate which is cheaper. It may be
better to take a large rebate over the 0% APR new car financing.
Compare to online auto loan rates. Pay off your auto loan early,
saving on interest. Applying the rebate and using your own
low-interest financing often gets you greater savings.
Don't
fall into the gap!
If you owe more on your car than it is worth, if you lease, or put
down less than 20%, you should get Gap Coverage from your insurance
agent. Most people call it gap insurance. Try not to buy it from
dealers, they charge $500-$700 when it costs 1/2 that online. If you
owe $20,000 on your car, but it's only worth $16,000, you're upside
down. You wreck the car, or it's stolen, your insurance company
gives you $16,000. You must still come up with $4000 to pay off the
bank, plus your $500 deductible! Gap coverage protects you against
this. The better ones cover up to $500 of your deductible.
Your
Deposits And Down Payment
Never pay cash for a deposit on new car financing. If the deal goes
south, at some dealers, you'll never get your cash back, but you can
dispute a credit transaction. If You need a new card for deposits,
and have good credit, try the Discover Platinum Card or the
Discover Gold Card, both have no annual fee. If your credit
is so bad and If you're in too deep, maybe now is not the time for
auto financing. But don't take on more debt with a consolidation
loan, try a
debt
reduction program instead like the non-profit
iDebtAssistance.com.
You get an interest rate reduction payment,
which pays off your balances much quicker than you ever could on
your own.
The VIN
Etching scam in the
finance office
Dealers slip in a $300-$900 fee for VIN# window etching into your
new car finance paperwork, lying that you won't get the auto loan
without it, "the bank requires it". You can order the same kit used
by car dealers online from
CarEtch.com
for $29. Some dealers lie that the VIN etch was free, yet it's
padded in your payment.
Bad
Affect Of Low Credit Scores
on your new car financing
Your credit score determines your new car loan approval and APR. If
you have bad credit and score is low, you'll pay high car loan
interest rates, up to 23%, with a bad credit auto loan. If your
score is below 720, you might not get those special 0% new car
financing rates. Your bad credit score affects how much you pay for
car insurance rates. People with bad credit have no clue
about this, maintaining your credit score should be an ongoing
process, not a rush job when financing a new car. That's the worst
time, banks will reject you if you have disputed items on your
credit report, until it resolves. It can take 60 days to clean up
your credit score, so don't apply for new auto financing until all
disputes are resolved and you verified your FICO Score. You have
been warned! I have seen people rejected for applying while "in
dispute." Then they get stuck with bad credit auto loans.
Credit
score myths: "I've never missed a payment. My credit score must be
high!"
Many people get upset at auto loan time when they find out their
credit score is low, and they have bad credit. Paying on time is
but one of 100 variables making up your credit score. Having many
open accounts will damage your credit score, as there is potential
for you to spend up to your credit limits. People with good credit
have too much credit and old accounts no longer in use. Having
credit account balances above 50% of the credit limit quickly
degrades your score, meaning higher auto financing interest rates
and bad credit auto loans.
How to increase
your car loan approval chances
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If you're a recent
college grad, don't apply for new car loans until you're at your
new job at least 6 months
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Apply
online at auto loan
sites like
Capital One Auto Finance or
E-LOAN who
don't play games with online auto loan rates
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Learn how to
repair bad credit, get your credit score to 680
before you apply for new car loans
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Pay down your credit
card balances as low as possible, payoff higher APR cards first
before applying for auto loans
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Don't apply for new car loans if
you have bad credit, moved in the last 6 months. Lenders hate
nomads, they verify addresses & income
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A previous new car
finance or home mortgage on your record helps
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Get a stable
occupation like engineer, architect, finance, etc. Self
employment is very difficult to get approved
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Haggle with
creditors to get charge off's, late payments, other black marks
off your credit report before auto financing
Credit card companies
say it takes 60 days for paying off your credit cards to show up on
your credit report, but who wants to wait 2 months before buying a
car? One of our visitors filed a request for investigation of her
report stating that the balances on these cards were incorrect, and
the investigator looked up her correct balances. She checked 2 weeks
later and it was changed. Also, by paying off 2 credit cards from
70% max credit level down to 0%, increased her credit score 100
points. That's the difference between paying 6% APR for a new car
loan, and 21% for a bad credit auto loan.
Steps to
take before you apply for new car loans:
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Get
your Credit
Score so dealers can't lie to you about your score. Flash it
in their face when they lie to you about your score
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Start comparing
online auto loan rates to new car dealers, use car loan payment
calculators
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Close old credit
accounts, they are excess luggage dragging down your credit score,
but leave your oldest account open
-
Remove erroneous
previous addresses and other errors off your credit report before
attempting new car financing
-
Wait until your
score goes up to 680 if applying for lowest rate car loans
New car
dealer financing is just a product the dealer sells you.
Is it an auto loan or not a auto
loan?
New car loans at the
dealer are not really new car loans, nor used car loans. They are
Retail Installment Sales Contracts (RISCs). Great acronym. The
dealer sells the RISC to a bank, often sharing interest rates, so
the higher APR they charge you, the more money they make. Unless
there is a subsidized low APR from the car maker, you'll usually
find lower online car loan interest rates at online new car
financing sites. Now you have lower online
auto loan rates. In the 1990s, we HAD to get our auto financing at
the dealer. New car financing is just a product the dealer sells
you. You don't have to buy their convenient product anymore. You
should never put yourself in a position where you rely on a new car
dealer to tell you how good your credit is, you should be telling
yourself instead by understanding your own credit report. This way
you avoid their bad credit auto loans. Subject to new car finance.
Don't Be
Fooled By Lower Monthly Car Loan Monthly Payments
When auto loan
shopping, look beyond monthly car payments. Sneaky dealers quote a
lower monthly payment than your bank, but the dealer's auto loan
might be 72 months, and your bank's auto loan is 36 months, a common
scam, to get you into a bad credit auto loan. Some dealers lie about
APR on their auto loans, but plugging numbers into a car loan
payment calculator exposes the lie. Auto financing is a cat and
mouse game. Always verify their numbers, make sure monthly car
payments match the selling price and APR that you are expecting to
pay. If you can't check their numbers, you have no business taking
out an auto loan! You have the right to know how much new car loans
will cost including interest rate, trade-in value, taxes, and fees,
all disclosed in writing. But there are people selling you new car
financing who don't want you to know how much you're spending, and
divert your attention by pointing out low monthly payments you are
comfortable with. The same happens with used car loans. Always car
loan payment calculators to verify car loan interest rates and
payments.
The Straw
Purchase car loan, don't do a co-sign!
This is the dark side
of auto financing. A straw purchase refers to a person buying a
handgun for someone who is ineligible to own one. That's how the
Columbine High School shooters got their guns. With new car buying,
the dealer tells you that with bad credit, you can't qualify for the
auto loan so you need a co-signer. No problem, Grandma will do it
for you. But Grandma is duped by the dealer paper shuffle and 2
weeks later you find out there is no co-signed auto loan, they wrote
the auto loan in Grandma's name! This does not help your bad
credit. Her name is on the title, and it's illegal for you to buy
insurance on a new car that is not titled to you. This is pulled a
lot on used car loans also.
How To Avoid The
Scam: Have both signers present, auto loans should have both
signatures together. A notice to the cosigner is required by the
Federal Trade Commission's Trade Regulation Rule on Credit
Practices. With bad credit you should try a cheaper used car, with
a used car loan.
For discount new car
buying we recommend sites such as
Cars.com,
InvoiceDealers,
CarsDirect ,
Autoweb,
Car.com and
Edmunds.com
and with online car financing, everything from
the last time you bought a new car is old school. The easiest way
to get pre approved for an auto loan is a credit union or
trustworthy online auto loan
sites such
as Capital
One Auto Finance,  E-LOAN, Lending
Tree and
AutoCreditFinders.
Before you buy a car you must have auto financing ready. Once you
are pre approved by the new car financing sites, compare online auto
loan rates to the dealer's APR. If the dealer can beat your online
car loan APR, with no cash flow shell games, finance through the
dealer. Otherwise use online new car loans. Banks charge a bit more
for used car loans, than new car loans.
Advantages Of Auto Financing: Online new car loans and used car
loans
Benefits of new car
loans from an online auto loan company:
and
E-LOAN
usually
lower than car dealers
Low APR, No app fees for New Car Loans and Used
Car Loans
Online car loan payment calculators, your auto
financing APR is locked for 60 days
Online new car financing avoids headaches,
bad credit auto loan
scams, and frustration of car dealer auto financing
Auto
loan approvals are usually within an hour during business hours
No
new car finance hidden fees, points, or prepayment penalties with
online new car financing
New
car loan lenders FedEx your check to arrive next day
When you buy your car, give
the dealer a bank draft from
Capital One Auto Finance or
E-LOAN
online auto loans
Auto
Financing for First Time Car Buyers And College Students with bad
credit
Some dealers have first time
buyer/college graduate auto financing programs subsidized by
carmakers. Sometimes there is no recent grad new car finance
program, they just charge you 18% APR for new car loans. If you
have good credit history, there's no reason to pay 18% in a bad
credit auto loan, they are feeding off your ignorance and rejection
fears. You have the same haggling rights I do, don't let any
salesman tell you otherwise. Don't fall for first time buyer "0
down" auto financing ads. You must put 20% down on new car loans,
or you'll be upside down on your auto loan. Salespeople tell you
auto loans are a way for you to establish credit, but it does not
mean you have to pay a high APR on your auto loan. You might try
used car auto loans too, since you will be borrowing less money. Use
car loan payment calculators to get used to the numbers. If you work
at your college, try an auto loan through the credit union, a good
place to establish credit. Don't let your parents buy the car cash,
or finance under their name, it wont establish credit for you. Pay
down your debts and clean up your credit score before applying for a
car loan. The key to stability is living where you can afford the
rent, even if it's not up to your standards, so you don't have to
move. If you move around you become un-creditworthy, and might only
be able to get a used car loan, or a bad credit car loan.
Driving Records
Driving Records are
state driver's license reports containing details about a
driver's history including accidents and violations. Each state
maintains records of their registered drivers' activities
occurring only in that state.
Driving records can be
obtained by insurance companies to determine your rates as well
as by companies during their employment screening procedures
when hiring. Some employers may even require that you submit
your driving
record along with your employment application. A single
typo on your
driving record can cost you hundreds of dollars in insurance
rates. It can even cost you a job. |
New car finance Rule: Don't trade in a car that you still owe
money on